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tv   Squawk on the Street  CNBC  August 14, 2009 9:00am-11:00am EDT

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ceo. andrea hanson. she came from h. stern. she had been with them for 25 years and had been in charge there. their growth and business. >> you are serious about this. >> yes. very validating she also left a long career at a company where she grew the enterprise and grew the business and came to join the company. she obviously sees we well positioned ourselves despite our small operation and excited to help us grow it into new mark zblets you got the can a seen and so then have you the real estate. are you like the government? >> i don't have health care. thank god. >> are you stretching too thin? >> no. everything i'm doing i think i'm -- you know, very focused on. i keep my priorities correct and the real estate is still my primary focus. i was part of the reason i brought andrea on to spearhead the growth of my jewelry venture which is a big part of what i do and an ancillary business.
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>> what do you think about real estate? when do you think we will see some sort of a turn? >> it is a great question. i think what i like that i'm seeing right now is the fact that the buyers come to the table are real buyers. you know, they -- some of them have already come six months ago, 12 months ago and offered some sort of ridiculously low price and we said no. and they tried again. we said no. you know, now they are coming back with realistic expectations of what sellers are willing to leave inventory for. i like that type of buyer. the people that come in to sales now are real and are motivated. a lot of times they are young couples looking to make their first significant purchase. so, you know, there has been a change. and in a positive direction. i just think it will take a while to get there zpr ivanka, thanks for coming in. it has been great seeing you. >> always a pleasure. >> best of luck with the book. congratulations on the rest of your news. see you back here again soon. >> thank you. will you still have me on now that i'm off the market? >> we will. >> perfect. >> carl won't be able to concentrate. >> thanks again. that does it for today.
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join us on monday. "squawk on the street" is next. consumer prices were unchanged in july according to the latest government data. without fad and energy prices up .1%. industrial production, factory capacity, university of michigan's consumer index. the fda cleared the new anti-psychotic drug. the company says sales of the drug could exceed $1 billion a yea year. live from the financial capital of the world, that's the outside view. we are right behind that flag. that's where we are. this is "squawk on the street." >> it is friday. >> that flag is right there. >> literally. >> outside that window. good morning, everybody. the open looks like it is going
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to be flat. plus retail stocks looking brighter. will back to school be better than expected? >> on this friday, just moments ago on "squawk box," mohammed el-erian says the market is on a sugar high. we know how those usually end. it is way ahead of reality. and the question is will investors start to -- will that sentiment feed through? we are looking at a slightly lower open. word on the street coming up. we did see futures sort of -- they are not doing much. moved on a nogginflation number. >> sounds like mohammed didn't buy in at the haines bottom. he is jealous. >> france, i believe and germany. >> i would trade our economy for france's any time. futures right now, as you can see, right even with fair value. so -- neither here nor there on the futures department, erin.
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>> let's get straight to steve liesman for the cpi number. i looked at the rounding. usually there's something there. i mean, 0.0000%. >> don't call it a nothing cpi, though, number, erin. you know, this is a very critical number for investors and when we get into the details by sector and industry, we will explain why. some of you are invested in companies that are industries prices are falling. some companies have pricing power. these numbers here which you will see are critical for making investment decisions. do you really want to be in a company or industry where prices are falling if on the front end or the pricing structure that -- input not falling as well. cpi unchanged. nothing. core rate of 0.1%. let's take a look at how we get to nothing. we get to nothing through a lot of drama. new corks, traction there. 0.5. gasoline was a big part of the difference between the headline and the core number.
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apparel, pricing power. inside that you see things like footware declining. housing declining. computers, minus 3.2%. food, look at hotels being killed there. that's not a year over year rate. that's a month-to-month rate. year over year, a 9% decline. education a place that has consistent pricing power. looking year over year at the headline number. you can see we are now firmly in negative territory. those are the blue lines. recession. that's percent change. year to year. we have not had these kind of declines in headline numbers. i think, ever. go back a very long time to the '50s there to find numbers like that. core rates a little more well behaved. 1.5%. coming down, not quite at the rate at 2003. 2004. that caused the deflation scare but certainly you can see that number from the peak in the middle there. early '07 where we had concerns about inflation. you see the disinflation. that's come down. lot more data to come. industrial production, 915.
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we will give thank you results of the philly fed's survey professional forecast. one of the main survey followed about what economists -- at 10:00. infind a lot of drama in this nothing number for investors out there. they ought to be following carefully because in this world where top line revenue is not growing, pricing power and gross margin are the keys to investment. >> all right. >> let's find out how all this is playing out in the market. bob pisani leads off the parade at the big board. >> not a lot of reaction. a lot of talk down here about china. shanghai down another 3% overnight. seems to be decoupling from the u.s. and europe. down 12% in the last seven, eight sessions. retailers coming in. abercrombie & finch up 7%. 30% decline in same-store sales, however. jcpenney, well, beat by a penny here. good news is raised in value the full year. third quarter numbers, a little below expectations. i think they are expecting fourth quarter to be a lot better than people think here. nordstrom come in last night. as expected the anniversary sale did very, very well.
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raised their full-year guidance a little bit. partly because they expect same-store sales not to decline quite as much as previously estimated. cnb >> the focus today will be on video games. npd group out with numbers. video games sales last month down 29%. year over year. we look at names like electronic down half a percent. i will bring you the stocks of phq once they get a little more volume behind them. that slowdown in video game sales is also affecting amazon. amazon down three-quarters of a percent. added to the strategic stock selection list at ubs. amgen up a half percent. fda panel voted against one of the key new drugs related to bone loss. downgraded over at citi. however, deutsche bank out with a note that says buy on the weakness the market simply got it wrong. auto desk is another one keep an eye on today. upgraded over at st. equity and
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barclays has positive comment on it as well. let's go to sharon at the nynex. >> couple of pennies higher. local equities did help in the overnight session to bring oil prices above $71 a barrel. we are below that level right now. we did get from hong kong gdp data in the second quarter, indlees helped some asian stocks and that was helping oil prices overnight. right now, again, we are still in this $70 to $72 range. probably trading in this tight range ahead of the weekend here. we are also looking at the dollar index at its lowest level in a week. and the dollar fell even a little bit more after we did get that cpi data. gold hanging on to the gains barely. up almost $2 right now. gold right now will ultimately watch the session. back to you. >> in air a overnight, japan's nikkei gaining .8% to end at its highest level this year. there's the number.
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10,597. hong kong's hang seng up. shanghai composite went the other way, down 3%. guy johnson in london, what's up where you are? >> we generally are higher. i know you guys are peeved about the fact that france and germany are coming out of the recession first. europe isn't just france and germany and the number coming out of the gdp front today from spain was bad. in fact, worse number since the 1970s. down 1% in the second quarter. peripheral europe is still not performing. let me take you to london where there is real annoyance about the comments that are coming out of the republican party about the national health service. indeed, a million people have signed up for the pro-nhs page on twitter. you are getting a real traction, real attraction with this story. annoyance here about how the far right is characterizing what the
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nhs is doing. let me highlight that. let me show you what the mark set doing now. 600 is up by .4%. it looks like we will have five weeks up now for the european market. you guys will be talking about boeing. mechanica makes the barrel for the new 787 with the wrinkles in them. that company down by .3%. barrel production has been suspended. eads is getting 350 from the british government as well. peter mandelson really criticizing washington today about how much subsidies boeing gets. so a lot of annoyance in the u.k. about some of the commentary coming from your side of the pond today. mark and erin, have a great weekend. see you monday. >> all right. our thanks. cpi storm. >> mark busts open his mutant
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tomato. that's a beauty. >> belgian giant. >> phil lebeau examine it is possible fuselage flaws in boeing's dream liner. el-e ri an's sugar high. we will be right back. eseseseses
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good morning. yes. friday. my sources are in the hamptons but i'm here wearing a pink shirt, i know. i already heard plenty about it walking through the newsroom. all right. what can we talk about this morning? steve liesman talking about the cpi this morning. the headline number falling to levels, i guess, not seen since they started keeping records. which brings us to the state of the consumer as well. a lot of revised gdp forecasts oar the last few days. and many of them looking for growth. but the division in those who see significant growth perhaps and those who don't really does come down to the belief as to whether we will start to see significant increases in consumption here. given that consumers for the first time in recent memory started to save money and, of course, where unemployment is, and any number of other things, which i will get to, no spending a lot of money.
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not a lot of demand so you see prices falling for any number of different things. mohammed el-erian earlier gave voice to that concern. and his, at least, outlook for the overall economy. not sure that we have that for you. when it come down to where the consumer stands, certainly housing plays such an important role there. we want to give thank you latest analysis from mark hampton who i use frequently, who we go to sometimes as well. total u.s. foreclosure activity, for example. there was one of these bands, if you want to call it, in california again by the largest housing market in the country. yet, take a look at that. that's where things stand. never have been higher. never been higher. and according to hanson and any number of other people that follow the housing market closely, we are probably going to see even more foreclosure activity in the future because you have gotten notice of
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defaults rising, notice of trustee sales rising, notice of defaults. take a look. as those go up, so, too, does foreclosure activity follow. if there is anything that's pressuring housing prices and bringing them down even further, many say it is foreclosures. get one on your block, perhaps it is a 1% reduction in price. you get two, and it starts to magnify the price reductions overall in a given neighborhood. if the consumer is going to come back to play, many expect that we need to fully see a bottom in housing prices. we have gotten a lot of different data. idiana olick. a key coming back to where the consumer stands and where this economy stands. we shall see. let me send it back to you guys.
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>> rick santelli here. we have july utilization and industrial production. all of these numbers may be skewed by different adjustments. you know about autos and things like cash for clunkers. stronger on the production side. up .5. improvement. expectations were at 68.3. if you look at 68.5 against where we were last look at 68.1, both instances, expectations in one-month history, there are improvements. so you can argue that cash for clunkers may not be economically sound and it obviously isn't the only variable here or the beginning of a variable but nonetheless, it does make numbers like this in gdp move in the direction that is to the upside. any response in the marketplace, well, we see that is -- data is putting a little bit of a bid in treasuries, nothing huge.
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it is putting an offer or a bigger sell in the equity markets and that, i guess, we are going to have to ponder because this data really wasn't a disappointment and just may have been looking for more. back to you. >> all right. going up, the -- the word on the street, buzz beyond. is the -- el-erian sugar high theory correct? what will happen when the rush is over? >> you know, in is interesting. you go from 68.1 capacity to the lowest in decades to 68.5. >> that doesn't sound like a on recovering economy. anyway, phil lebeau on possible fuselage on the dream liners off delayed dream liner. the project -- is it turning into a nightmare? we will talk about that with phil.
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the futures, you can see, we are going to -- pretty much of a flat open as people are trying to get to the bottom of what really is going on with inflation. we obviously, as steve and rick said, a lot of economic data coming throughout the morning and will continue to delve into the capacity utilization numbers, perhaps the most important driver for whether this economy is recovering or not. now let's get to phil lebeau on more possible fuselage flaws in boeing's dream liner. >> we have just talked with boeing. they confirmed they stopped production of 77 fuselage barrels. and actually they are not the ones that are -- it is happening at their italian partner.
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and a unit of them had a -- i'm saying it completely wrong. that's where the barrels are made. here is essentially what happened. boeing stopped fabricating the new 787 fuselages june 23 after small microscopic wrinkles were found in the fuselage. two barrel sections of the fuselage. what the company had done is developed a patch that it will put on the outside skin of the fuselage for planes 7 through 29 which have gone through the process and they are reworking the manufacturing process for those barrels that will be made from here forward. the company has not said when production will begin again. there has been no impact on the schedule for delivery first flight, et cetera, of the 77 or on 787 cost. again the company says there is no impact on the schedule or cost. when i asked them, well, why haven't you told anybody about this before now? mark, the answer was because this is fairly common in the
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develop many process for a new airplane and because there was no impact on schedule or cost the company chose not to say anything. of course, it showed up in an aviation blog and as a result, boeing is now addressing concerns that yet again, there are more problem was the 787. mark? >> thank you very much, phil lebeau. down on the floor with dr. gordon charloff. the fair tomato grower. gordon brought in tomatoes this morning. but then destroyed the evidence before we had a chance to get them on the air. this is a fair approximatemation of what your tomatoes look like. >> pristine, juicy, color. . yes. >> this is a haynes tomato. careful. >> you don't want to show how disheveled that thing is. i had some in the booth. >> here you go. >> falling apart. once again, you are left holding your own.
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you know what i'm saying, haynes? >> no comparisisocomparison. let's look at the market. >> yeah, we are stuck here. you know, the soft spot in this market, continues to be retail. jcpenney coming out with guidance today. same story. top line is weak. but there's -- still the guidance is reasonable. but at some point, you know, has to catch up. one out of six right now is either unemployed or looking for a better job. that means the people that are working are holding a little bit tight with their money. so, you know, once this restocking cycle ends, i think we are going to start to see a pullback, mark. i think the early money will start heading for the door and we will head south. >> all right. same process. >> yes, sir. >> even though the market has been going up. >> hope it continues.
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>> it is not stand-off. you are losing. the market is going up. you need the market to go down in order for you to be right. did you say it is going down, goes up. that means you are wrong. we will check in next week and see where we are. have a great weekend, gordon. you are probably eating all of your tomatoes already that they are so small. we will be right back. let's go back upstairs to erin. >> mark, remember you said you were sharing the tomato up here. belgian -- >> yeah, i'm bringing back. >> all right. let's get the buzz from beyond the big board. art hogan joins us now from midtown manhattan and he is jeffrey's -- i'm sorry you will miss a piece of mark's tomato. economic data still coming in the next hour. >> it is interesting. the cpi came spot in line with expectations. we would like to see signs of inflation. we haven't seen that yet. remember it is still early in the cycle for that. if we work our way to the fall
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and don't start seeing a modicum of inflation, that's will be bother some. the other piece of the puzzle here, between can't celebrate the industrial production numbers that are bouncing off the low of the cycle which was last month. remember, this is moving in the rate direction. up to 68.5 capacity. we need to be in the 70s before we can say we are out of the woods here. i don't think we are going to celebrate the economic data so far today. a lot more coming out and certainly picked it because there has been more good news than bad news and market proved that out. >> so, art in terms of the next couple of weeks, right, someone wants to maybe -- going away on vacation. you just want to jump in and put a little bit of money to work. what do you do? >> inning. probably a difficult trend. you are talking about economic volume. great deal of volatility over the next couple of weeks. i certainly that if you wanted to be -- exposed to the market, into the move september, which could be difficult, you want to look at two things. you want to be energy -- energy complex calmed down and seemed to reach a sustainable level or i don't think that's reflected yet in the equities behind the
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commodities. technology will have a lot of m&a activity going on over the next six months. you will see some of the big guys gobbling up a lot of folks further down the food chain and technology. if you are looking to tuck money into the market at this juncture, in front of what could be precarious september, those are probably two safest sectors. >> art hogan, thank you very much. have a good weekend. >> you, too. thank you. final countdown of the opening bell on the other side of the break. don't go away.
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their research is independent and unbiased. their investment consultants are knowledgeable and there when you need them. so why not talk to one? announcer: call today to schedule a free investment check-up, or visit a td ameritrade branch. you are watching cnbc's "squawk on the street." we are live from the financial capital of the known universe. the opening bell is going to ring. where's my clock? in about one minute and 20 seconds. the futures, they put on a little bit of a spurt there before they closed. we are now a couple points above fair value. we might get 10, 20 points on the dow at the open if it stay
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this way. >> i'm looking down here to get a little bit of color on the past utilization. just actually instant messaging was steve liesman and it is pretty amazing. when you look at the 20% surge in auto out put why does past utilization only go up by .4%. and part of the reason is in the media and public imagination auto is still hugely important. that will help gdp. in terms of overall american factories they are not as important as we think they are. >> no kidding? >> auto capacity utilization up to 45.3%. you did did get a big jump. but overall it is not as important to the economy as you might think. >> we are using less than half of our automobile capacity? >> yes. >> 45%? >> right. using less than half of it. and obviously a little bit of a pickup in the future. even that, even that huge jump -- >> that's not good. >> it is not going to be very
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much for the headline utilization number. >> here we go with the bell. the big board. alps celebrating the lifting of the alps equal sector weight etf. nasdaq net entertainment. wire digital gaining systems used by online standing operators. >> our market reporter standing by. we are open down barely just as we thought. let's get straight to bob pisani. couple of the names in the headlines. >> the important thing is europe is up. china is down. decoupling. 3% decline in shanghai. down 12% from the recent highs. retailers coming in. mixed picture here. we have -- abercrombie. 30% decline in same-store sales. a all about international growth. three international flagship stores. investors are willing to wait for those particular sales. that stock just opened 3%.
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jcpenney right here. jcpenney is going to open down just slightly here. if you are wondering what the story is, they beat by a penny. the important thing is they raised full-year guidance. they are being very conservative. be conservative and theat the numbers later. the street estimates caught up with the conservative numbers and that's why we sell on the numbers here. even though they did raise value. pretty much the same story for nordstrom's. anniversary sale was very good and that was anticipated. good news for them. again, their commentary conservative. same-store sales did raise the decline a little bit. they are in the going to have as much of a decline for same-store sales. that will help them but same situation not doing much in the open. small cloud around citi. bank of america raised. that stock -- can't see it now. opened up 2%. how are we looking at the nasdaq? >> we opened slightly weaker this morning. down 3.5 points.
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nothing too big here. certainly want to keep an eye on the video gamers after i mentioned data the group came out with. 29% fall in video game sales last month. year over year. and some of these stocks have been under pressure. as you can see, literally as i'm talking here, they turned from a negative to positive. interactive, negative turned marginally positive. there's stocks that worth keeping an eye on today. big couch mixed off the open. amazon down about 1%. it certainly impacted from the drop-off in video game sales. there is a positive news today added to strategic stock selections list over at ubs. amgen, flex waiting quickly between positive and negative. fda panel voted against the key drug related to bone loss. downgraded over at citi. deutsche bank with a note saying now is the time to get in. buy on the weakness that the market has it wrong. auto desk upgraded on to source
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of funds. barclays says it would be aggressive buyers at the market. earnings better than expected. >> auto market manipulation more pronounced in london? well, the financial report says that's not necessarily the case. even though some u.s. lawmakers have been pushing that idea. keep in mind the cfc released new data that shows that there's not a greater preponderance by speculators in the market in the u.s., the u.k. that's something that you may want to check out and continue to follow as we do here. nynex prices, that's because it will expire the september contract in today's session. nynex options expire monday. usually that means there is a lot of activity in the options. relatively light volume today. biggest price we are seeing, open interest. $65.
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meanwhile, natural gas futures are slightly higher. after the sell-off yesterday. again, 20% above the five-year average. rick santelli, to you in chicago. >> thank you, sharon. shaq was talking about yesterday, many traders like intraday short-term relationships, remember, there's a lot of fast money in the system. they are not trading the long term here. one of these relationships is the dollar in equities versus things like commodities and fixed income. even though equities, lofty levels. anxiety of how long they could stay there or why they are there, shows up in some buying and treasuries. we want to pay attention to that and have university of michigan sentiment survey. i will cover that in about 15 minutes. most of the data today, well, if you look at industrial production, utilization, it was on the good side. it is underscored by various issues like those cars steve was talking about and the big capacity in the system. mark, back to you.
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>> thank you, rick santelli. markets heading lower after absorbing the cpi number. are investors running out of steam after getting ahead of themselves? joining us, the founder of deeg an financial advisers and bob stein, managing partner with asset management. dan, you are going to bum us out. >> no, i'm just realistic. >> i feel the markets will drop 25% to 50% and it will happen abrupt abruptly. >> i believe it will. >> why? >> i think that because there's no basic foundation for the run-up that we have. the run-up has been far too rapid and continues to run up on what's normally considered bad news. i think basically wall street was trying to shove things down main street's throat. now washington is trying to do it. i think main street is stepping back and saying you know what, we were really, really scared before. but now we are finding out what was really going on with some of the same stuff we are find what
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the fed is doing, finding out about the health care business and they are angry. they are absolutely angry. look at what is going on with these town hall meetings. none of this is stuff is positive. it is very, very negative. americans are very, very angry. in addition to being scared. bad economy. >> rob stein, you are not particularly bullish either. >> no. i don't think a drop like that is going to happen. you walk down the street and get mugged and lose 50%. i don't think you are going to walk down the street the same way again. that kind of -- kind of decline is not in the cards. i actually think we are going nowhere. get used to the prices you are seeing on the screen now. i think these are going to be the levels we trade at, 5%. several months, if not the rest of the year. >> and then it comes to what's the next catalyst. i mean, one way or the other. let's start with you, dan. sudden drop. is it just -- is it because we have come too far too fast? will there be a precipitating factor? >> i think that's part of it. the -- too far, too fast part important sure. i also think that the confidence
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in the full face and credit of the u.s. government is really starting to wane. not only internationally but here in our country. the challenge is that when -- when treasuries are -- half of the treasuries are purchased by the fed, that's not fully disclosed until later, until they spin it, that's a negative, negative. it is not just china and other countries worried about it. when you can't finance essentially signature loans, that's where all the treasuries are, it is not like the collateral is the white house or congress, there is no collateral. full face in u.s. government. when that starts to fade interest rates have to go up on those offerings and that's the only way you can reslice it is offer a higher interest rate on a new issue. that's a huge, huge problem. i think -- i think it is moving along with the credit challenges of credit card debt and a lot of dei leveraging that will go on. >> you agree credit issues are coming back and are going to quote, unquote squash the recovery. >> yes. there's two types of recessions going on. there's traditional inventory and employment and recession.
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where companies reduce payrolls and reduce inventories and have you this recession to get lean and mean and grow. and then the other recession is a credit crisis recession occurring. the inventory employment one is through the trough, that's starting to abate and starting to grow. the question is will the growth from the normal inventory build up and normal recession that we are through be strong enough to support the coming recession when the credit crisis reemerges. i think it will. i think the growth from 2010 will surprise everyone on the upside and when the credit crisis comes back again, i don't think it is as doom and gloom as your other guests think. i have been hearing about government not being able to issue debt for years now. it will be a blip and another slowdown and not nearly as severe as we had. and we will grow our way through that. >> all right. dan, you like food, shelter, health care, energy. bank branches. do you like physical gold bouillon? >> right.
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>> and rob likes -- i don't get this, rob. tech, health care and energy. it also says history -- losers from the last recession do not become winners the next expansion, tech. >> no, no. financials. >> okay. >> in the -- tech in the previous recession and, you know, down 60%. never recovered. in this recession, financials got hammered and i don't think they are going to be the leaders. >> stay away from financials. thank you both very much. coming up, jcpenney's wise and pound foolish in this morning's favor report. >> penny wise. >> don't worry. it will make sense when david explains it. >> new way to measure media watching. jewel with a boorstin will are more on why it will mean cnbc's ratings will surge. i'm racing cross country in this small sidecar,
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archrivals teaming up to measure how consumers are watching media across all platforms. cnbc's julia boorstin has the news on a consortium in the works. plans to give nielsen a run for its money. julia? >> their, mark. sources tell me a major partnership is in the works to form a consortium that measures media consumption across all format particularly online and mobile. the consortium is not finalized nor is the list of companies involved. the sources tell me among the media giants, disney and nbc universal are the most committed to participating. in the venture. all media companies, top adviser like procter and gamble, biggest advertising agencies, starcom are all talking about being a part. the idea would be to go beyond what nielsen's dom in an rating system offers. it would address tv measurements would focus on how consumers
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interact with content and advertising in new media. currently advertising buys are based on tv ratings and measured only by nielsen and a company measures online video viewing and those numbers aren't incorporated into its main ratings. this comes as quarterly as sales have fallen from media companies across the board reflecting lower broadcast ratings and shift of consumers online where neither content creators nor advertising are quite sure how to reach viewers or monetize them. while advertising may pick up this as we heard from media ceos, it seems the next leg of growth will be online. giving arch enemies reason to join forces to better understand and profit from the new market. in terms of timing i'm told the group is going to formalize and announce the partnership by mid to late september. now over to david faber for the faber report. >> thank you, julia boorstin. i wanted to follow up on stories that, you know, talked about a
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lot during the course of this year. bunt haven't visited in some time. and they were not particularly a good story from an investment perspective along with stocks or for their majority shareholders but worth mentioning. let's start off with las vegas. the stocks back up to, well, to the teen. teenager again. that's saying a lot. yesterday right before the close, 3:15, 3:30, the company came out with a press release in which it said it completed amendments of a credit facility related to a operations in mattcow. increased the ratio leverage under the credit facility and increased the interest rate in macau. but ultimately what it did is gave it morley way and more time. it gave it a lot more financial flexibility. it was viewed as a strong positive. the stock gapped up about 10%, 11%. you can see today it is lower. take a look at where the stock has been. low on the year is about $1.30 a
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share. we were talking frequently about the financial constraints this company was under. given the incredible falloff in business. in both macau where things seemed to have rebounded fairly well but not back to all-time highs. and, of course, in las vegas. there is a look, though. the stake in the company worth a good deal more than it was when the stock was hovering below $2. we will see from here, research notes out today. mixed bag. lot of people saying probably fairly valued right around here at 12 times the -- getting out of macau. there may be more to come from las vegas. so the same for mgm. again, there -- it is -- majority shareholder, kirk can he korean. you can see that shop up sharply from the lows as they managed to convince their partner, dubai
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world, to come back to the table to help finance completion. there's a lot of losses potentially still to come on the project. again, you are still dealing with a very slow las vegas economy with a lot more capacity coming online. but it is worth mentioning. both of these companies nobody is talking anything about bankruptcy. at least not any longer. always a lot more flexibility in these kind of situations. perhaps than appears to be when things seem very dire. all right. erin, i could talk jcpenney but i guess i ate up all my time somehow. not quite sure how i did that. let me send it back to you. >> all right, david. we will see you again in a couple of moments. down 57. for now, they have taken a move to the downside. it can whipsaw these days. a look at more names. >> this morning's industrial production numbers. rising for the first time since october.
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the economists calling that number key. we are going to take a look inside that industrial sector. really keep promising a recovery. >> we are going to have the university of michigan's consumer sentiment. that can really matter today. that's coming up on the other side of this break. we will be right back with the breaking headlines. mr. evans? this is janice from onstar. i have received an automatic signal you've been in a front-end crash. do you need help? yeah. i'll contact emergency services and stay with you. you okay? yeah. onstar. standard for one year on 14 chevy models.
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"squawk on the street." i'm matt nesto. crazy stocks moving today. i have been talking about genworth because it is up 900% from the march lows. downgraded from sell to hold at citigroup they sadie tooror eighting fundamentals. tenant health care. super hoty. up 400%. it is being raised to outperform from neutral at rw bear. fading during the day. it was a five a four, three. now about 2%. about 12 cents. and barnes & noble, talking up their acquisition of their college book seller and bringing
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that under one roof. credit suisse this morning says it raises the risk profile and eats up the free cash flow and they are concerned about that one. taking to underperform from neutral, down about 7%. back to you. >> thank you, mr. nesto. industrial production, talk about this. more than expected in july. and it was the first monthly increase since october. what does this tell bus the health of the economy? and think upside that we really could be seeing in industrials and manufacturing? joining us is jim sweeney. matthew christie, standard & poors analyst. matthew, we are trying to get to the bottom of it. it is sort of incredible you saw such a surge in auto output and surge in auto capacity utilization. but when it got to the overall number, autos didn't appear to be as influential as we might think. >> you are right, erin. ex-autos, industrial production, up .2% which it is not
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necessarily without -- it is not without -- >> sorry. >> sorry, sorry. >> frog in your throat. >> industrial -- production up pretty well. i mean, you are looking at -- a sustained increase in the economy. well, other stats, i tend to look at, tend to look at, ism numbers, industrial, production levels are actually up. new level orders are up. more importantly, custom inventories are -- response to customer inventories were down in the last month. actually, decreasing for the last four. which to our opinion, suggests that industrial production should continue to increase. >> and you also think it will continue to increase and, again, the question is not to -- is it going to go up but will it go up enough to spark this self-sustaining economic
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recovery? >> yes. absolutely. i think that it is going to continue to go up from the month. and i think it should be looked at in the context of global industrial production which actually has been going up for a number of months already. i think this is a positive number. not quite as strong as we might have hoped. but it is stronger than the overall consensus. if you look globally the trough in global production was sometime in q2 and we had a significant improvement in asia and i think this summer is about that improvement broadening to be really a global phenomenon and strong numbers in the next few months in the u.s. and europe. that's our expectations. we see peak in peak momentum in global manufacturing and in really july through except. >> all right. you know, we only have 30 seconds left. that's not going to be enough time to give you a decent chance to answer. thank you very much for your input.
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matthew christie and james sweeney. we are awaiting the university of michigan consumer sentiment which should hit the wires right about now. rick santelli is standing by in chicago. to give us the number as soon as it comes up. good morning, rick. >> good morning, mark. well, it isn't out yet but it is one of the scenarios where subscribers, of corks, get in early. here we go. 63.2. this is not what we want to see if you are a green shoot person. if you are more -- you know, take it for what it is. maybe it expresses some of the anxieties that we all know are out there. even though things improved. the number is 63.2%. this is preliminary august. it is coming off of a 66.0. we see that the treasury market, logically would be rallying and pushing down rates. and we also see a logical response in the equity markets which is a bit of a downtrade. foreign exchange -- >> take a hit.
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>> dollar taking a little hit. already hit a bit before the number. mark, back to you. >> thank you very much. >> mark, you know, interesting as rick was talking about, rick, appears to be that consumers much less favorable assessment of their own situation. even as in the same various they did say the whole economy is getting better. maybe that is real concern. people overleverage, people have money. outcome. answer there would be individual basis, it is negative. macro basis is positive. that's concern. >> yeah, it is. that individual view -- >> adds up. >> is what -- what comes people will spend money. the economy is okay. i'm not doing too well. that means i'm not going to spend money. all right. coming up, the stock is up more than 180% since the hmark haine bottom.
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>> europe's largest equity investor. executive director of noors bank. into way. any given day is second largest crude export. >> got a lot of zbloyl got a lot of oil. oil prices have been darned high and have one bet that may surprise you.
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welcome back. we have breaking news on the philadelphia reserve forecasters. showing commerce getting substantially more openistic about overall growth this quarter and next. seems to be bearish on the job market the next several years. the fed survey forecast of quarterly one shows in gdp for the third quarter, they have had 2 347b9% now. up from the old forecast of 0.4%. second quarter forecast. fourth quarter you can see not quite as robust. apparently pulling growth forward. 2.2% versus 1.7%. annual outlook here. you can see that we get back to call it trend growth by 2011. and, again, 2012. look at unemployment. you can see they kind of kicked up their unchanged for the third
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quarter. but you can see that for the first -- fourth quarter, 9.9% versus 9.8%, 10% mark on inflation. unchanged when it comes to both the headline and the core. call it 0.4% higher. these surveys, guys, in line with the surveys we did up in maine again and one that was done by "the wall street journal" this week. economists optimistic for this quarter and the next. erin? >> steve liesman, thank you very much. and i know mark was listening carefully. job numbers. let's get straight to it. bob pisani with the big board. look at the reaction. overall to all the data we have gotten but in particular, the consumer sentiment, fewest consumers in the survey's 60-year history reported improved finances. >> we -- >> market down 106. >> we have seen the market drift lower here although in fairness, it was drifting even before that here. we have seen real weakness. not just today but the last couple of days, very specific groups here.
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i want to point out some of the groups like commodity stocks. energy stocks have had a terrible eight, nine, ten days. hence, down every day for ten days. at some point. some of the commodity stocks have done a little bit better. they are all under pressure here today. most down 2% to 4%. homebuilders really look like they are starting to take break here. remember, some of these guys were up 50% from the numbers that -- we saw in july here. so this rally is starting to stall out here for the homebuilders as well. finally the key story on the retailers is simple. you can see jcpenney and modestly raise your earnings guidance but it is very conservative earnings guidance overall. the street is already there. the street raised the number to where they are at. that's why even though they have numbers that beat expectations a little bit, the stocks are not moving up here. this is another group that has had a big run the last month. >> similar story. weakening as well here. down just 1.5%.
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internet stocks, microsoft down to the down side. apple 1.5% back. google is down about 1%. yahoo is down about 1%. i will show you amazon in a second as well. research in motion is the plus side. intel down a couple of percentage points. that gives you a as a matter of factoring there of a large cap technology stock. watching the video gamers. tibing higher. even though the ndp group out with dismal data. year over year, last month. here is amazon down 1.5%. affected by that drop-off in video game sales. autodesk up 4% on an upgrade over at the state equity. internals. you have about three to one decliners over at advancers. >> mid august and we haven't talked much about storm activity. we continue to watch as we are in the middle of hurricane season. we are specifically looking at a tropical depression forming off of the west african coast. talked to meteorologists and
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aaron and he said this action could enter the caribbean by the middle of next week. and could perhaps enter the u.s. gulf coast region by august 24th. there is a likelihood when it does so it would be a hurricane. not sure, of course, what level it would be, what category it would be at that point. probably may not have much of an impact on oil and gas installation. we are seeing a slightly higher here and in natural gas. futures covering ahead of the weekend. oil on the other hand, much lower than consumer sentiment number, can't shake fit there is not a lot of consumer confidence and not a lot of energy demand and you see oil prices down 68 cents, under 70 a barrel. >> well, i will tell you what, sharon. there is a lot of action in the fixed income market. we will get a one-month chart. consider this. that last week, the ten-year was up 40 basis points from the 340s to the 380s. we go through supply and not so good data. equity market starting to wiggle
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from its peak levels. all of a sudden this week, we are down 30 basis points from the mid 380s to the mid 350s. i just talked to the option guys. what we are seeing is options really getting hit hard here. but they have been volatile. might be a great buy because look for these weekly ranges with every other weak supply in changing data landscape they have a huge impact in that arena. mark, back to you. >> okay. more than 100 million credit card payment actions every month. last year the company was the victim of one of the largest ever security breaches. criminals hacked computers. long road to recovery. the stock is up more than 180% since the bottom. joining us now, chairman and ceo, bob carr. thanks very much for being with us. >> thank you very much for having me. >> bring us up to date. i assume have you taken a lot of steps to ensure that kind of
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breach doesn't happen again. >> we have taken a lot of steps. every step we know to take and every people recommended to us we have done because who we to say after breach we shouldn't do one more layer of security. we -- also, formed a users group to help share information about breaches and they had been lacking in our industry and also have been working on building technology solution so it is not in the clear. >> the cost, the charges, are you through that part of it is there more to come? >> we just announced our call last week. taken $32 million worth of charges in the first two quarters. we don't know what to expect going forward. and i really, you know, can't say because we don't know. >> obviously, you are doing transaction processing. so you can see, i guess, the amount, how much people are charge. >> we sure can. >> and what are you seeing? i can see people may charge more, right? because more things.
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because they have less cash. how does -- >> surprisingly, 92% of all purchases are from available funds. that means prepaid cars, debit cards, or people who don't revolve their balances. 8% are being financed which is -- i think an all-time low in the industry. also, our same-store sales year over year are down. very high single digits. almost 10%. so -- >> what does that mean? i mean -- >> people are spending, going to the store, a little bit less often like 3% less often. use credit and debit cards. but the dollars are down about close to 10%. >> they are going less frequently and when they go they are spending zbles right. the dollar amount is down much more than the number of visits it is down. >> and you are primarily -- you primarily deal with smaller businesses, correct? >> we have large customers. we have -- we are -- process about a quarter of a million locations. i would say our typical customer
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is a larger independent company but we have some very well-known named companies as well. >> are you surprised by the consumer sentiment number which is showed that people are -- about their own situation but are more optimistic about the overall economy? do you read into it what we sort of did instinctually that's not a good thing? >> it doesn't seem to be a good thing. the green shoot seems to have fizzled out. the same-store sales are not getting materially better. they do seem to have bottomed out. which is good news. the sort of confusing. how the -- how the -- consumer sentiment can be low with everything that's going on. >> yes. >> i admit to being confused. >> right. cash for clunkers, we were talking about. you would think if there was a time to be more optimistic it would be this. >> most of your business domestic, correct? >> 99% of our business is domestic. little bit in canada. >> all right. thank you very much for the update, sir. we appreciate. >> it thank you for having me. >> robert carr, heartland
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payment systems chairman and ceo. >> interesting. visits are down and dollars spent. >> the consumer sentiment number, it all -- fits together. >> it does. >> up next, michael vick goes to philadelphia, disgraced star back in the nfl. eagles coach says i will think of something for him. >> we are off to norway to talk about the oil fund. second largest exporter in the world. they have one bad mark. 10% to their funds. on something i think might surprise some of our viewers. >> tolls. >> it might be tolls. then the clock started for the review executive compensation for the top 25 employees at the likes of gmac, bank of america and citigroup. what's he going to do, mark?
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market down about 110 points. and the primary reason for this was a disappointing reading on consumer sentiment. particularly how americans rank their own financial situation and concern over finances. working our small gain and job losses. philadelphia eagles signed michael vick to a two-year deal. surprising many. the team is set to announce the deal with vick within the hour.
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but before anything happens darren have a vel has the winners and losers of the situation. darren, wow. >> yeah. i will give thank you winners and losers now. that could change at 12:00 after i hear everything. much of the reaction to michael vick will depend how he answer questions about his dogfighting past that landed him in jail. kept him out of the league the past two seasons. we are going to speculate on the winners and losers before vick opens his mouth for the first time. let's start with the winners. vick himself gets a second chance making some money. first year of the contract worth $1.6 million which is much more than the $620,000 minimum many thought he was going to be getting. how about conway free, freight company based in california. logo on the banner behind where vick will be speaking. talk about getting a lot of eyeballs there. then how about the eagles ticket brokers who now can get more for their money in the secondary market. august 26 preseason game against the jaguars. first game that he will play. the on only one at home. most expensive preseason ticket we have ever seen probably.
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how about the losers? start with 60 minutes. given the exclusive with vick supposed to come on sunday. now vick is going to answer all the questions today. how about people for the ethical treatment of animals n they obviously have been outspoken about not signing vick. they lost that battle last night. vick's job to make sure this group which can surely organize a good protest as soon as possible. biggest loser, ufl. starting the season, would have been a big boost if they could get vick. he would be their home. and sponsors back out? i think that question is not answered yet. depends how vick handles himself today. >> thank you very much. darren rovell. we will be getting updates from you. >> you can already preorder your michael vick jeries. >> really? >> on yes. >> that's great. all right. new developments in the bernie madoff saga. former cfo of hadassah.
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she said she had an affair with madoff. "love, money, secrets, bernie and me." mary thompson to weinstein's arraignment after madoff's. she withdrew from his madoff accounts earlier. memoir will be published august 25 by st. martins press. up next, ivanka drum open commercial real estate. stuck between not rewarding risk and make sure it is comfortable to industry standards can be a tough thing.
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with help from the scooter store, medicare and my insurance covered it all. call the scooter store for free information today. call the number on your screen for free information. ivanka trump gives her take the housing market. mohammed el-erian, the french
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lover of the market housing prices are starting to stabilize. certainly serious delinquencies in foreclosures will continue to rise for a while. i think if -- we can get this home affordable program working more effectively, we will see more stabilization. >> at the end of the day, commercial real estate isn't so difficult to understand. when people aren't hiring, they don't need office space when they don't need office space, it is high rents. >> on the one hand, there has been a lot of progress made in derisking the banking system but still a lot of risk out there in other sectors that haven't yet been resolved. >> today ken feinberg will begin reviewing the executive pay package plan for companies who are still on government life support. that includes citigroup, general managers, aig. he will have 60 days to accept or reject the company's proposals. he has to refrain from rewarding big risk taking and has to make
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sure pay is in line with the various overall industries. and as he himself in a no-win situation, here to weigh in, the personal financial industry fund is up more than 18% this past year. ken seigel, president and owner of the impact group, los angeles based company, consults the management and senior execs. ken, what do you think? can he possibly win? >> he is in a very difficult position. because any time the government gets involved in private enterprises is there will always be reaction. branding him as the pay czar is in advance bad branding. he's really there to re-establish some sense of trust and credibility in an industry that has been rampant with misuse and of use over the years. that's his real role. re-establish a sense of trust in what these guys are doing. >> you are talking about wall street, i assume. >> well, prime air there industry is over whom he will
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have some direct influence. primarily the banking industry and really, i guess, wall street in general, yes. >> yes. isn't part of that, you know, i -- i'm of two minds on this one. seems to me part of the problem is you talk about branding. part of the problem is branding on wall street. calling these things -- bonuses is -- it is really a misnomer. i mean -- they are not getting -- they are not getting this pay for performance. they are getting the pay once the company sees how much money it made. you know. the -- the salaries are actual salaries are peanuts. >> exactly. that's why he's in such a difficult position. because look, there is a problem. the system is not working. if it was, the government wouldn't be getting involved in this. they don't want to -- they don't want to have their hands in these kinds of enterprises. they want private enterprise. >> you are an invest wror and now the person that everybody in washington wants to -- well, you are the one that's supposed to vote and decide what you want.
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are you angry? are you upset by what is reported that an average of -- anywhere between $4 million and $7 million apiece for the top 25 people at citi and bank of america? >> i'm not upset by it because lot of those executives owned a lot of stock and worth a lot less than they used to be. i think that the pay practices, obviously, do have to change. and pretty much based on performance. there's no doubt that you want to keep people who are ring makers and produce a lot of receive fly and are good want to -- you want to keep them and pay them. nobody is talking about how much a-rod makes or how much madonna makes. these guys actually -- you know, did get punished by the stock they owned. >> they aren't taking government money. >> no -- >> that's the point. >> but the important point, also, is, you know, if we taxpayers own part of the companies, we want these companies to make a lot of money. so, you know if you take one of the top commodity traders at
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citi, you worry about paying $100 million, well, what if you brought in a billion dollars? do you not want that billion dollars? do you want to get rid of that buy and start his own firm? you know, it is -- it is a very difficult line to follow. but you definitely want to -- >> it really is. >> it seems to me -- there is an issue -- shareholders like anton, everybody may not agree with him, but a shareholder and wants the company to make money so the stock goes up and earnings goes up. the taxpayers seem sort of torn between wanting to make more money and somehow have exact revenge. how can we separate those two things? >> it is very, very difficult because there is a point of which people consider executive pay to be both excessive and outrageous. in these industries, where the cost has been so great, where they have cost so much heartache for so many people the average person really does identify more with their neighbors their lost their house and how much money the executives will make over the long term. the sense of outrage over this excessive amount is a huge pay packages, that's what, in fact
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is most outrageous and average person can't say he brought in $100 million worth of business and should get 10% of that. s it is way beyond the mind. >> all right. anton, ken, thank you very much. >> thank you. >> thorny issue. >> taxpayers got the vote. how would we determine how that stake votes? i guess that's ken feinberg technically. the guy voting that stake. >> tough questions. you don't get quality people unless you pay them. >> that's very true. >> that simple. >> all right. >> revenge on yourself. coming up, stocks on the move. temple, inland mp. global. biggest decliner for the nasdaq today. and has this derailed the health care debate? >> what was supposed to be health care town halls have become forums for airing of
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every government grievance of taxes to alleged monitoring of e-mails. what the administration has to do to get the base back on track. that's in today's harwood file. s
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call or click today. in the head lines this hour, markets decline. accelerated for a while. stabilized now. we are down triple digits.
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boeing, boy, oh, boy. lower on the story you probably saw. another delay in dream liners. joy global heaviest on the nasdaq. crude oil, crude oil, is down more than a buck. back below 69. earlier 69.35 now. >> we want to bring your attention to some stocks on move. matt nesto back with the real-time flash. matt? >> all kinds of things moving here today. let's start off with the temple inland, down 8% here. reduced to neutral from accumulate at buckingham. it is in the mid cap index and also the russell 1,000. up 500% from the trough. that's in -- if that's any consolation. they make cardboard. it is down about 6%. the stock has gone from 15% to 45. it guess from neutral to accumulate. again, buckingham, they are taking money off the table, off the hot stocks. ubs also boots it from the focus
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list. they still are ready to buy. earlier in the week goldman flip-flopped for joy global on the conviction buy list. joy sunday pressure here today. up 75% year to date. everybody is in the house. e.j., ticker for e-house china. chinese real estate firm. stock is up 2% to outperform from neutral. oppenheim oppenheimer. buy this bay boy weakness. it is at a billion dollar market cap. they think it is headed to $27 per. plenty of upside left in that one. then also this is a confusing stock. phillips van hughesen. some people don't know if it is retail. make all kinds of shirts. they sell the labels for whoever wants it done. russell 1 thousand. 3% higher. overweight rated at jpmorgan. earnings coming out next week. bullish call ahead of earnings. lastly, they make labels at
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office supplies, pens, you name it. avery dennison, strong stock in a weak market. jpmarg an with the upgrade. overweight from neutral and avery dennison up about $28 a share. back to you. >> thank you very much, matt nesto. let's get to john harwood with the "harwood file." roll the animation. >> hey, mark. look, i want to bring a little bit of reality to this health care debate that we have all seen playing out on our television screens over the last couple of weeks. we have seen the pictures of the shouteding people. confronting arlen specter and claire mccaskill at the town halls. we heard all of this talk about nazi death pen els. that's good coffee chitchat for the hospitals but it is not real. in a big country like this you can get people, small number of people to go out to town meetings and yell at their senators. but it doesn't really do service to the real opposition that is out there and the real division within the country on this issue
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which has to do with the legitimate issues of cost, access and quality. many of those differences, guys, come from the different ways americans see and reassess the u.s. health care system. look at numbers we saw. when you ask americans do we have a health system that is above average or the best in the world, a majority of republicans say yes, we do. they don't need government as much and don't like government as much. ideological. same with democrats in the reverse. only about a quarter of democrats say that we have an above-average health care system or the best in the world. they need government -- they like government more. and that in turn -- independents are in the middle. then when you look at the huge differences by party and how people assess barack obama in handling this issue. that tells you what is happening around the country. 77% of democrats say barack obama is doing a good job on health care, only 10% of
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republicans. that 10% helps explain why chuck grassley the other day at the town hall meating in iowa chose to surf that death panel wave rather than refute it. he is getting too much heat within his party and party leadership to go along with democrats. bottom line for that is that barack obama, who had a town hall in portsmouth, new hampshire, earlier this week, having another one today in montana, and his job over this recess is to keep his own party together and when i talked to white house officials, they believe they still have the vote within the democratic party in both the house and senate to pass health care bills. so the -- the bottom line, mark, and erin, this health care debate is somewhat more on track from a democratic point of view, not from a bipartisan point of view, but from a democratic point of view, a lot of coverage would suggest so far. >> you are being too kind to senator grassley, john. >> well -- you could be right. >> you don't -- you can be
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against this bill and not play that death panel fear card. >> i completely agree with you. >> he should be ashamed of himself. thank you, john harwood. >> scott cohn. developments related to the bernie madoff case. >> the massachusetts secretary of state, william galvin, rejected a settlement, multimillion dollar proposed settlement, bin of the largest madoff feeder funds. the fairfield green itch group. the fairfield greenwich group was sued in an administrative group back in april saying that the -- feeder fund failed to protect madoff investors. this fund had offered a multimillion dollar settlement which we are told would have included full restitution for the massachusetts investors, direct and possibly indirect in that fund. which is roughly about $6 million or so from roughly ten individuals. the massachusetts secretary of state's office has shot that
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down. it is calling it a transparent attempt. thinly veiled attempt to circumvent the administrative process, pointing out the settlement would not have made any admissions of guilt. they take issue with that and it is all premature because there hasn't been a hearing. this proposed settlement with the fairfield greenwich group has been rejected by the massachusetts secretary of state. fairfield greenwich is trying to devote its attention we are told bay spokesman to the litigation much more substantive litigation in new york by the bankruptcy trustee picard, taking multimillions of dollars from fairfield greenwich groups. trying to get this one out of the way. the massachusetts secretary of state saying no way. >> thank you, scott cohn. wow. not having a good day. down 130 on the dow. seems we can't get this moving the right way. coming up, young and successful series concludes with a crescendo. a 23-year-old entrepreneur for
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whom music is instrumental to success. >> life is your art form. i'm with that sort of a locale. getting cozy with my friends. >> out here at the game of chicken, california egg ranchers may be forced to spend hundreds of millions of dollars to give these hens more room. the question is how much room do the chickens want? we will have that after the break.
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okay. this is one of our favorite suggests on "squawk on the street." >> yes, it is. >> where's bernie? >> where is he? >> he was right here. >> here he is. >> we kind of collect chickens,
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pictures of chickens, cards of chickens. new chicken farm laws getting egg on california's face. jane harriet wells has more. janey. >> guys this is a pre-range operation. you know, people love an meals. california voters overwhelmingly approve proposition 2 last november. which would force ranchers to give each chicken enough room so they can spread its wings without touching another chicken. the problem is the law is so vague that to quote the ap, egg ranchers are bedeviled. eggs are a $300 million in california. prop 2 gives ranchers to convert their operations to give room. you would think this would be great news for this place which is already free range and does not have cages and it is open. >> we are about 9,000 of my closest friends apparently. >> china owe valley ranchers has
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been cage-free since the 1970s and organic for a decade. making the product expensive. it is so unclear. hay is not even sure if this place provides enough room for his chickens. >> hundreds of millions of dollars invested as to what is prop 2 compliant. until we know we have no way to start to begin to do this. if you take the absolute strictest definition of prop 2 which says a bird -- majority of the day, an egg laying hen has to be able to extend her wings and turn a circle in the ground, that means you would have to have about five feet of space for every bird. as you can quite plainly see, there are -- they are a very social creature and like being near each other and they feel comfortable this way. if we gave them more space, they wouldn't use it. >> farmers don't have to be compliant until 2015. they haven't even started the transition process because nobody really knows what they have to do. and add to that, the state ladies and gentlemen slate tour
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is considering a bill to force any out of state farmers which import eggs to california and abide by prop 2 as well because california does import most of its eggs. if the importers aren't forced to abide by the same rule, the university of california, erin, says that the california egg industry, which is the fifth large nest the nation, will disappear within six years. we will have to see what happens. >> i am impressed you cannot have to hold your nose in there. you know, i have two kids, changing diapers -- >> you are the expert. do they natural just crowd together? >> they do crowd together, yes. but we used to call it, in maryland -- california maybe could learn from, p.u. perdue, mark. they create waste and can smell horribly. what's interesting, we talk about opportunities with chickens. if you have about 3 million chickens you are creating as much from those chickens every
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day as 30,000 people. so when you talk about turning waste into power, people don't always think of chicken manure. they talk about cows. there's something there to -- >> i would not want to be near the plant that's burning chicken manure. >> not going anywhere near chicken production, it is rather fowl. >> rim shot. let's move on. >> all right. our youngest success series will conclude on a high note with a self-made millionaire entrepreneur. joining us is the founder of instrumental savings and online retailer and distributor of musical instruments. "the richest kids in america." nathan, great to have you with us. i'm glad we are -- we are coming to a -- a better smelling topic here than chickens, shall we say. tell bus what it is that you do. what is instrumental savings? >> we are a musical instrument
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retailer and distributor for central california. we are the affordable music store. >> affordable music store. so you sell every -- all kinds of too many band equipment? >> correct. we sell from guitars to band instruments, back to school, when is the season now. accordion, to world instrument by harps. and indian music. instruments. the whole range. >> where did this idea come from? which is it is a funny story. i was walking home to my apartment at usc, university of southern california. my roommate, christopher, had a guitar in the room. i saw his guitar. you know what? i'm going to start selling musical instruments. i was looking for a retail business and looking for a product. i saw the guitar. the idea. >> it was that simple? you are -- >> exact. >> i you are 23 years old.
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>> right. >> do you feel the need for more education? >> i'm always a student and now i'm learning from my consult apartments and advisory board. i'm always a student and always the need for education, always critical for me. >> actually, that was -- that was -- that was a loaded question. what i was aiming at was -- do you feel the need to get an mba? >> you mo what? i -- i'm thinking about it. depending on my time because right now, i think, the -- mba i'm learning for now is the industry and going through the experience. >> how have you been doing in the economy? how has your business been doing? >> it is actually a lot better. we had to do a lot of changes. right now the economy is adjusting to companies that are fundamentally strong and the people management system. and so we had to change all of that to make it better. and right now, we are -- you know, we change a lot because
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before, a lot of our successes were hidden by -- false because a lot of mistakes were hidden. with this economy you have to do things right fundamentally to keep it successful. we are glad we have the right people on the team to tell me what i'm doing wrong beforing and we are actually doing a lot better than last year simply because we are focussing on the right things and mowing exactly how we are contributing to our society and what our missions are. >> you were born in vietnam and immigrated to the united states in 1991. you were about 5. >> yes. >> do you think that being an immigrant has made you even more excited to be an entrepreneur or to work harder for the american dream? do you think there's something about being an immigrant that makes you not take things for granted? >> absolutely. you know, my parents and family sacrificed a lot to have me here in america. and the fact is that it is i can't let my parents down. and i on like to be an example
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for -- relatives back in vietnam and i want to definitely help my family and parents living the american dream. so i'm just really blessed with the opportunity and i want to give back as much as i can. to the society that's offered me so much opportunity. >> yes. nathan, thanks a lot. appreciate your time. continued good luck and success. >> thank you. >> we are going -- up next -- >> the thing that strikes me, every one of these young people we have interviewed, they are all very personable. >> yes. very likable. >> they are very like sxabl well spoken. >> they have presence. every one of them. >> yes. what's up? >> the market slide accelerating. we are off the low, though. we are down 126. is it the consumer sentiment number that came out and disappointed? we are on the friday trade, how to go into the weekend. >> but first --
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>> good morning, guys. happy friday. we have a lot coming up for you on the call today. first off, we will start with the mixed economic numbers. different signals this week. some pointing to a recovery. some mott. just exactly what is in store for this potential recovery and how can you profit from it. president obama wants to star higher fees to the banks to help cover some of the costs of the financial reforms. we are going inform debate whether or not this is fair and how will you be affected. we have all that plus the latest on michael vick signing with the philadelphia eagles. what does it mean for the nfl's corporate image. all your market news from the new york stock exchange.
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we're back. we're on the floor of new york stock exchange. the market accelerates -- well, not quite true. accelerating for a while, pretty instead for the last hour? maybe more. maybe less. anyway, we're steady. is this the end of the rally?
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the end of the sugar rush as we were warned about, or a little cause for the weekend? we have a market analyst in pittsburgh, where if you're lucky, you can still pick up a good fall player or two from the pirates, because they're trying to get rid of everybody. charlie smith of fort smith capital group, and director of u.s. equity derivatives trading, as well as a cnbc options action contributor. these intros are way too long. let's start with wayne. what do you think? what should we be doing ahead of the weekend? >> well, the market is working off and overbullish. and overbought condition. we have options expiration next week. so we probably go down sometime into next week. we've got support levels on s&p, 992, 93 is short-term. then one fibonacci retracement, about 10 points below.
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what? >> definitely should be buying, but wait a little bit. we're buyers, we think the market goes higher, longer term. monthly charts do not call for any of these tremendous down drafts that some people are calling for in september and october. >> charlie. >> yes. in keeping with the theme from jane wells, i'm going to pick a chicken cyclical, like a c.a. >> chicken cyclical. >> a company if the economy does go back in the tank, won't be hurt too badly. their a systems software utility company, sells to blue chip customers, very steady revenue stream. they've had a good move the past three weeks, but i think if the economy gets hit again, they will hold up well. >> i like that, chicken cyclical. many years ago i was in the radio business and there was a format called chicken rock. it was not quite rock, so as not to offend anybody. >> exactly. >> and this is along those same lines. what do you think?
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what should we do ahead of the weekend? >> well, oil has pulled back a little bit here. i happen to like a name in the energy space, chevron, one of the big integrated oil trades, did a little discount in some of the other integrated oils, and has a little bit less natural gas exposure than another one, conocophillips. i think obviously if we really believe that we're coming out of the recession and i think there is a lot of good evidence that we are, you know, you want to be long some of these names. plus nearly a 4% dividend yield. >> wayne, what about your ideas? you are interested in real estate, which i guess you're saying we are going higher, but an etf. >> we like real estate, reits are being bought. a lot of what is happening in the last couple weeks is stocks that have been killed have been recovering financially. a lot of reits, financials, we have been buying them. i also particularly like the insurance sector. prudential, allstate, affleck.
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these charts look great and should be going higher over time. everybody still needs to buy insurance. >> and we haven't had -- i guess they have a little bit of pricing power right now, but we haven't had any massive -- well, i guess you're property and casualty too, or all -- >> everything, all of the above. >> charlie smith, aside from the chicken cyclical, you also like verizon, huh? >> yes, we think telecom hasn't done particularly well this year. if we get weakness in the marketplace, the laggards like telecom i think should hold up well, because they haven't seen much of a rally. >> and michael, you have another name to talk about. robert haaf. >> yeah, robert haaf international. we spent a lot of time talking about employment, and i think this is interesting to take a look at, because i think it's embem attic of a lot of names that have done well. i used chevron as an example that has underperformed. this is trading at or above this time last year, and obviously
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it's in a very different place. year over year, the last quarter, they had about a 39% revenue decline, and trading at a pretty much, much multiple. what i'm saying if you own it, i would take a second look at whether you've had a good run in this name. and also in general, when we look at the market, one of the things you want to keep an eye on, is this one of the things that's participated in the rally and is there a good fundamental reason for it to have done that? and if it hasn't, maybe that's where you want to lighten up and start looking at some of the names that haven't participated as much and have good fundamentals. >> all right, gentlemen. the weekend is many will upon us here. wayne coffman, chief market analyst, and john thomas, thank you. in pittsburgh, charlie smith. and mike of u.s. equity derivatives, and, by the way, you can catch mike on options action. >> with melissa lee. >> right here on cnbc. new time! >> new time. >> 8:30 p.m. instead of 11:30. >> oh, ho.
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melissa lee gets to go out dancing. >> for "options action." yeah, that he changed it so melissa could go dancing. >> up next, a check on the markets. he ran off with his secretary! she's 23 years old! - oh, come on. - enough! you get half and you get half. ( chirp ) team three, boathouse? ( chirp ) oh yeah-- his and hers. - ( crowd gasping ) - ( chirp ) van gogh? ( chirp ) even steven. - ( chirp ) mansion. - ( chirp ) good to go.
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